Economic returns to speaking ‘standard Mandarin’ among migrants in China's urban labour market

Abstract

This article uses data from the China Urban Labour Survey administered across 12 cities in 2005 to estimate the economic returns to speaking standard Mandarin among internal migrants in China's urban labour market. The article builds on studies that estimate the economic returns to international immigrants of being fluent in the major language of the destination country and studies that estimate the economic returns to proficiency in the national language among groups of people who speak a minority language. Importantly, we control for potential endogeneity bias in the estimates of the effect of language fluency on earnings. We find that for migrants as a whole, there are considerable economic returns to speaking standard Mandarin. We also find gender differences. While the coefficient on fluency in standard Mandarin is statistically significant and large for females, the coefficient on fluency is statistically insignificant for males. One possible explanation for this finding is that female migrant workers are engaged more in occupations which have greater contact with urban locals and hence the return to investment in language skills is higher.